Stiglitz: European austerity like ‘medieval medicine’

Remember that austerity is exactly what the US Republicans are also promoting. They’re oblivious to the downside of austerity and even pretend as though downsides are non-existent. Meanwhile in Europe, we’re seeing the UK drift back into recession and the austerity program is only now kicking in. There will be a lot of economic pain in 2012.

“The answer, even though they see over and over again that austerity leads to collapse of the economy, the answer over and over [from politicians] is more austerity,” said Mr Stiglitz to the Asian Financial Forum, a gathering of over 2,000 finance professionals, businessmen and government officials in Hong Kong. “It reminds me of medieval medicine,” he said. “It is like blood-letting, where you took blood out of a patient because the theory was that there were bad humours. “And very often, when you took the blood out, the patient got sicker. The response then was more blood-letting until the patient very nearly died. What is happening in Europe is a mutual suicide pact,” he said.

Chris in Paris
An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.